Responsible Business Lending Coalition Welcomes Small Business Loan Disclosure Act 2021


Statement in support of the Small Business Lending Disclosure Act of 2021 by Louis Caditz-Peck, Director of Public Policy at LendingClub Bank, on behalf of the Responsible Business Lending Coalition

WASHINGTON, November 18, 2021 / PRNewswire / – The Responsible Business Lending Coalition (RBLC) – the leading cross-sectoral small business finance coalition – welcomes today’s introduction of the Small Business Loan Disclosure Act, 2021. The law will set common-sense standards of transparency in small business financing at a critical time of recovery for Main Street. RBLC thanks the Chair of the Chamber’s Small Business Committee Nydia Velázquez and senator Bob menendez for embodying true leadership and commitment to small business by sponsoring this bicameral legislation. We also applaud the Chair of the House of Commons Financial Services Committee. Maxine Waters, Chairman of the House Subcommittee on the Protection of Consumers and Financial Institutions Ed Perlmutter, Chairman of the Senate Banking, Housing and City Commission Sherrod Brown, and Chairman of the Senate Committee on Small Business and Entrepreneurship Ben cardin for serving as the lead cosponsor on the bill.

Today, the federal Truth in Lending Act guarantees transparency in consumer loans, but does not apply to small business financing. Without the transparent disclosure of the Annual Percentage Rate (APR) that we take for granted in loans for homes, cars, credit cards and personal loans, a range of confusing or misleading ways of disclosing the true cost of financing appeared in small business credit. markets. This lack of transparency can make it difficult, if not impossible, for small business owners to effectively compare their financing options, and can hide APRs of up to 358%. Choosing an unaffordable financial product could mean the difference between success and failure for businesses coming out of COVID-19 and for entrepreneurs just starting out.

By enabling small business owners to identify which loan or advance may be affordable for them, and by introducing transparent price competition for small business finance, we anticipate that the Small Business Loan Disclosure Act, 2021 will bring more $ 4.7 billion savings for nearly one million small businesses per year, including hundreds of millions of savings for around 400,000 small minority-owned businesses—A substantial sum that can further propel our national economy towards full recovery.

The Responsible Business Lending Coalition, along with 20 local, state and national business organizations and stakeholders, is urging lawmakers on both sides of the aisle to pass this landmark legislation to support our small businesses, local communities and national economy.

TILA Federal Approval Quotes from RBLC Members

Accion Opportunities Fund
“Entrepreneurs of color have suffered the brunt of the economic fallout from COVID-19, with more than 19% of black businesses, 10% of Latinxes and 10% of Asian businesses shutting down permanently, and they will continue to face an uphill battle. In the coming months. This is a critical time for small businesses to start rebuilding themselves, and access to capital will be crucial in this effort. The Small Business Loan Disclosure Act of 2021 is key to ensuring transparency, giving small business owners, especially entrepreneurs of color, a fair opportunity to make informed financial decisions for their business. “- Luz Urrutia, CEO of Accion Opportunity Fund

Community investment management
“Small businesses deserve common sense transparency in evaluating financing options so they can make informed financial decisions and play a key role in rebuilding our economy – and this bill addresses that. In the face of our current economic crisis, entrepreneurs desperate to keep their doors open are vulnerable to predatory lenders at the worst possible time. We all have a stake in the financial health of our small business community and should rally behind national legislation to protect their fundamental rights to accountable and transparent financing. “- Jacob Haar, Managing Partner of Community Investment Management

Fundraising circle
“We believe that a free and fair market works most effectively when there is transparency in prices, terms and conditions. When a small business has all the information it needs up front, including the rate. Annual Percentage (APR), she can compare prices and learn decisions that are best for their business. Funding Circle supports a uniform national law on small business financing disclosure because it is in the best interests of small businesses and they need our support more than ever. Ryan metcalf, head of US public policy at Funding Circle US

Loan Club
“Common sense transparency standards promote innovation by allowing small businesses to compare prices. This groundbreaking bill will create healthy competition, lower prices for small businesses and support responsible lending. “- Louis Caditz-Peck, Director of Public Policy at LendingClub

Opportunity Funding Network
“At a time when many small business owners need capital to stabilize their businesses, this legislation is key to helping small businesses access affordable and responsible financing and avoid predatory, high-cost lending products. APR) ensures that entrepreneurs have the knowledge they need to make financial decisions that grow and strengthen their businesses. “- Lisa mensah, President and CEO of the Opportunity Finance network

Majority of small businesses
“Unregulated predatory lenders come with the promise of quick cash flow for small businesses; however, these lenders often use bait and change tactics that can lead to the financial ruin of a business. For years, predatory lenders have been able to bypass transparency and deceive small business owners. to pay off a loan at exorbitant rates, sometimes up to 350% APR. As small businesses face a long road to recovery from COVID-19, we cannot allow them to enjoy it any longer. Having access to clear and precise loan terms will be essential in helping small business recovery in the months and years to come. We commend Senator Menendez and Congresswoman Velázquez for leading this charge in Congress, and urge all members to join them in providing American entrepreneurs with the financial transparency they rightly deserve. – John arensmeyer, founder and CEO of Small Business Majority

About the Coalition for Responsible Business Credit

The Responsible Business Lending Coalition (RBLC) is the leading cross-sector voice on financial protection for small businesses. The coalition includes not-for-profit and for-profit CDFIs, fintechs, investors and small business advocates who share a commitment to innovation in small business lending and serious concerns about the rise in lending. irresponsible to small businesses. The coalition created the Small Business Borrowers Bill of Rights, the first cross-sectoral consensus on the rights small business owners deserve and what finance providers, brokers and major generators can do to enforce those rights. . Over 110 small business lenders, lead brokers and generators, and advocacy organizations have endorsed these standards. Members of the Responsible Business Lending Coalition include Accion Opportunity Fund, Community Investment Management, Funding Circle, LendingClub, Opportunity Finance Network, Small Business Majority and the Aspen Institute. For more information visit www.borrowersbillofrights.org.

Contact: Caitlin mcshane
[email protected]
415-225-8855

Cision

Show original content:https://www.prnewswire.com/news-releases/responsible-business-lending-coalition-commends-small-business-lending-disclosure-act-of-2021-301428721.html

SOURCE Coalition for Responsible Business Lending


Comments are closed.